If interest rates are to be considered a political football, the 2007 Federal election was the Grand Final. They have becomes such a fixture of economic discussion that’s it’s hard to imagine we’ll ever move past it, but I’m hoping this was the last time they will feature so prominently in an election debate. So let’s put the issue to bed.

The Coalition were guilty of misleading the public on nearly all aspects of the way role interest rates play in our economy. In 2004 they made as much hay as they could out of this, and paid a price for it. Why couldn’t they resist the temptation? Well, we all know that Australia is awash in a sea of debt. The numbers certainly attest to the fact that Aussies were sensitive to interest rates in their political leanings. (more…)

According to conventional wisdom, the Coalition are the ones to be trusted on economic management. A current poll offers these distressing statistics:

The Coalition is strongly ahead as better economic manager — 40 per cent, compared with 12 per cent who put Labor as the better manager of the economy.

I’m sure many Labor insiders bridle at these sorts of statistics, because like most conventional wisdom, if you really try and investigate the logic behind it, you don’t come up with much. For instance, according to Wikipedia – a source that Howard’s own staff are free to edit:

During Howard’s tenure as Treasurer, the 90-day cash rate peaked at 21% on 8 April 1982, while home loan mortage rates were capped at 13.5%, and inflation peaked at 12.5% in September 1982. Peter Costello commented, in 2007, that “The Howard treasurership was not a success in terms of interest rates and inflation… he had not been a great reformer.”

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